SME Chamber

Gearing up for SEPA – The Single Euro Payments Area

As from 1 February 2014, all credit
transfer or direct debit payments in euro made within or between any of the 27
EU Members States, Iceland, Liechtenstein,
Norway, Switzerland and Monaco must be SEPA compliant. What
does this mean for Maltese businesses in practical terms?

In a nutshell, with effect from 1
February 2014:

  • The SEPA requirements will not
    only apply to cross-border payments, but will apply equally to payments where
    both the payer and the beneficiary are in Malta – including, therefore, all
    "direct credit" arrangements to pay monthly salaries, etc., as well as all
    direct debit arrangements between service providers and their clients to settle
    telephone bills etc.
  • All credit transfers must


(i) The beneficiary's International
Bank Account Number (IBAN). Therefore payers must take steps to convert all
beneficiary account numbers to IBAN format. Local banks are temporarily
offering free conversion services to their customers to facilitate this
process, so contact your bank to avail yourself of this service.

The Business Identifier Code (BIC) of the beneficiary's bank. So payers
need to obtain this information from their creditors if they do not already
have it.

In view of these requirements, all
businesses should make it a point to quote their own IBAN and their bank's BIC
on all their invoices, so that this information is readily available to their
own debtors when the latter need to effect settlement of those invoices.

  • All direct debits must likewise specify the payer's
    IBAN and the BIC of the payer's bank.
  • Where a business transmits "batched payments"
    to its bank (i.e. payment instructions covering individual credit transfers or
    individual direct debits which are not to be executed individually, but are
    bundled together for transmission), electronic file formats for such payments
    will change. New file formats based on ISO 20022 XML standards will be
    mandatory (except for microenterprises*). This will involve updating of the
    business's accounting, payroll and payment systems to incorporate the IBAN and
    BIC, and to generate / read XML file formats.



All this calls for close liaison
between management, the Accounts and I.T. Departments, and external I.T.
providers, and will require time and resources to implement. Provision must
also be made for testing, and to give appropriate training to staff.

The clock is now rapidly ticking
towards 1 February 2014, so there is no longer time to waste. Time is of the
essence to ensure a smooth transition to SEPA. So GET READY for SEPA….ACT NOW!

* A microenterprise is one which
employs fewer than 10 persons and whose annual turnover and/or annual balance
sheet does not exceed € 2 million.

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The Malta Chamber of SMEs represents over 7,000 members from over 90 different sectors which in their majority are either small or medium sized companies, and such issues like the one we're experiencing right now, it's important to be united. Malta Chamber of SMEs offers a number of different services tailored to its members' individual requirements' and necessities. These range from general services offered to all members to more individual & bespoke services catered for specific requirements.

A membership with Malta Chamber of SMEs will guarantee that you are constantly updated and informed with different opportunities which will directly benefit your business and help you grow. It also entails you to a number of services which in their majority are free of charge and offered exclusively to its members (in their majority all free of charge).